In Washington, winning is most important thing

A group of cotton industry leaders was meeting with a USDA official. After exchanging pleasantries, the official came right to the point: “Why don't you just tell me what you want because I know you're going to get it anyway?”

I can't vouch for that story, but I know the cotton industry has a long-standing reputation for getting what it wants in Washington. NCC Chairman Woods Eastland talked about winning when he spoke to the American Cotton Producers and The Cotton Foundation in New Orleans.

“One thing I've learned in my time as chairman is the most important thing in politics is to be viewed as a winner,” he said. “It's important to be seen as an organization that gets what you want because it's that much easier to get the next thing.”

That emphasis on winning is taking on new significance in the aftermath of the bitter debate over the Dominican Republic-Central America Free Trade Agreement, which passed by nine votes in the Senate and one or two votes in the House.

U.S. sugarcane and sugar beet producers — and textile manufacturing organizations — were on the losing end of that debate, leading to questions about their future chances of success. The sugar lobby's battle against CAFTA was in name only. The real fight was against the North American Free Trade Agreement and the potential for more Mexican sugar imports.

The latter are limited under a side letter signed by Mexico and the United States when NAFTA was negotiated in 1993. The side letter is slated to expire in 2007, giving Mexico's exporters duty-free access to the U.S. sugar market.

Under the current program, USDA manages import quotas so that the domestic price of sugar does not fall below 21 cents per pound (versus 6 to 8 cents per pound on the world market. U.S. sugar processors have been trying to do away with the sugar program for years.

“The sugar growers felt they had a gun pointed to their head with the possibility of more foreign sugar in 2007,” according to one observer. “They tried to use DR-CAFTA to force the administration to deal with NAFTA. Agriculture Secretary Mike Johanns promised no more foreign sugar would come in under this farm bill, but that wasn't the issue. NAFTA was.”

Sugar lobbyists also attempted to persuade the administration to divert Mexican sugar for ethanol, a move that would have cost about $100 million because of the difference in the production costs for converting sugar. But the administration balked at the expense.

“U.S. Trade Representative Rob Portman was beside himself because of the sugar producers refusal to support CAFTA,” the observer said. “I would hate to be a sugar lobbyist and have to walk into Mike Johanns office and ask for something these days.”

Cotton industry leaders, themselves late supporters of DR-CAFTA, are trying to pick their battles wisely to make sure they don't wind up on the short side, he said.